Berlin: German automotive giant Volkswagen is reportedly preparing for the largest restructuring exercise in its 89-year history, with plans to eliminate around 100,000 jobs worldwide and shut down four manufacturing plants in Germany as part of a sweeping cost-cutting strategy.
According to reports published by Germany’s Manager Magazin and cited by CNBC, the proposed restructuring would reduce approximately 15% of Volkswagen’s global workforce. The move comes as the company faces mounting pressure from growing competition in the electric vehicle (EV) market, particularly from rapidly expanding Chinese automakers, along with the impact of US tariffs on the automotive industry.
The reported plan was presented by Volkswagen CEO Oliver Blume to senior executives earlier this week, according to Reuters. Besides workforce reductions, the company is also expected to reduce its future research and development spending by 15%, bringing its five-year investment budget to just over 130 billion euros (around $148.2 billion).
As part of the proposed overhaul, Volkswagen intends to halt production at three major German manufacturing facilities located in Hanover, Zwickau, and Emden. In addition, Audi, Volkswagen’s luxury subsidiary, is expected to close its manufacturing plant in Neckarsulm.
Volkswagen had previously indicated plans to reduce around 50,000 jobs in Germany by 2030. However, the latest proposal significantly expands the scale of the restructuring and represents the company’s most extensive cost-saving initiative to date.
The automaker has been losing market share in China, where domestic EV manufacturers have strengthened their position. Industry data cited by Reuters shows that non-Chinese automakers’ share of the Chinese market declined from 57% in 2020 to 32% in 2025. Volkswagen was overtaken by Chinese EV leader BYD in 2024 and slipped to third place in 2025.
Chinese manufacturers, including BYD, Chery, SAIC and Leapmotor, have also been increasing their presence across Europe, intensifying competitive pressure on traditional European carmakers.
Responding to the reports, a Volkswagen spokesperson declined to comment on what the company described as confidential internal documents, stating that any final decisions would require approval from the company’s governing boards. However, the spokesperson acknowledged the challenges facing the automaker, saying that the entire Volkswagen Group, including its brands and subsidiaries, must undergo “profound change.”
According to the company’s internal financial data, Volkswagen employed approximately 657,400 people globally at the end of the first quarter of 2026. If approved, the proposed restructuring would mark one of the most significant transformations in the history of the global automotive industry.
